ROSENSTOCK as administrator of the estate of H. W. ELSER, v. BURKE

ROSENSTOCK as administrator of the estate of H. W. ELSER,  V. BURKE

G.R. No. 20732 

 September 26, 1924 

FACTS

The defendant Edwin Burke owned a motor yacht Bronzewing.

Defendant Burke negotiated with plaintiff H. W. Elser, for the sale of the yacht.

The plan of the plaintiff was to organize a yacht club and sell the yacht for P120,000, of which P20,000 was to be retained by him as commission and the remaining P100,000 to be paid to the defendant.

To carry out his plan, the plaintiff proposed to the defendant to make a voyage on board the yacht to the south, with prominent businessmen for the purpose of making an advantageous sale.

The yacht needed some repairs to make it seaworthy. The plaintiff paid almost all the amount because the defendant said that he had no funds for the repairs. The cost of those repairs was P6,972.21, which was already paid by the plaintiff, plus P1,730.84 due to the COOPER COMPANY which still remains unpaid, plus P832.93, due to the plaintiff, which also remains unpaid.

The plaintiff believed, in view of the result of the voyage, that it was convenient to replace the engine of the yacht with a new one which would cost P20,000. Plaintiff directed the defendant to contract a loan from a bank, but such P20,000 loan was not granted.

APRIL 3, 1922 LETTER - the plaintiff wrote a letter to the defendant in his presence:

MY DEAR MR. BURKE:

In connection with the yacht Bronzewing, I am in position and am willing to entertain the purchase of the yacht xxx

Plaintiff filed an action against the defendant to recover the sum of P6,139.28, the value of the repairs made on the yacht which he had paid for.

DEFENDANT BURKE’S ARGUMENTS

the plaintiff purchased the vessel in accordance with his letter of April 3, 1922

cross-complaint: the plaintiff be compelled to comply with the terms of this contract and to pay damages in the sum of P10,000.

The Cooper Company was admitted to intervene and claims in turn its credit for the repairs made.

TRIAL COURT: Defendant to pay for repairs……Plaintiff to comply with contract of purchase 

Both the plaintiff and the defendant appealed from this judgment.

ISSUES

1. Whether or not this letter was a definite offer to purchase? NO

2. Whether or not the defendant should pay for the repairs? NO, PLAINTIFF SHOULD PAY.

RULING

1. NO, IT WAS NOT A DEFINITE OFFER TO PURCHASE.

The letter begins as follows: "In connection with the yacht Bronzewing, I am in position and am willing to entertain the purchase of it under the following terms…“

To convey the idea of a resolution to purchase, a man of ordinary intelligence and common culture would use these clear and simple words: I offer to purchase, I want to purchase, I am in position to purchase.

But the plaintiff instead used this other, I am in position and am willing to entertain the purchase of the yacht.

The word "ENTERTAIN" applied to an act does not mean the resolution to perform said act, but simply a position to deliberate for deciding to perform or not to perform said act.

Taking into account only the literal and technical meaning of the word "entertain," it seems to us clear that the letter of the plaintiff cannot be interpreted as a definite offer to purchase the yacht, but simply a position to deliberate whether or not he would purchase the yacht. It was but a mere invitation to a proposal being made to him, which might be accepted by him or not.

Furthermore, there are other circumstances which show that in writing this letter it was really not the intention of the plaintiff to make a definite offer.

• The plaintiff never thought of acquiring the yacht for his personal use, but for the purpose of selling it to another or to acquire it for another, to obtain the commission.
• The resolution of the plaintiff to acquire the yacht depended upon the replacement of the engine, which evidently did not materialize because the defendant’s loan was not granted.
•  According to the plaintiff, when he was dictating to his stenographer that part wherein he said that he was in position to entertain the purchase of the yacht, the defendant interrupted him and suggested the elimination of the word entertain and the substitution therefor of a definite offer, but the plaintiff clearly said that he was not in position to make a definite offer. Thus, the word entertain now appearing in the letter was preserved. The stenographer Mr. Parkins and another employee of the plaintiff Mr. Guzman corroborated this statement of the plaintiff.

2. NO. THE PLAINTIFF SHOULD PAY FOR THE REPAIRS.

In view of the fact that the plaintiff was the one who directly and personally ordered these repairs, and that he was not obliged to pay anything for the use of the yacht, his mere testimony contradicted by that of the defendant, cannot be considered as a sufficient evidence to establish the latter's obligation.

Furthermore, according to the defendant, nothing was agreed upon about the kind of the repairs to be made on the yacht and there was no limit to said repairs. It seems strange that the defendant should accept liability for the amount of these repairs, leaving their extent entirely to the discretion of the plaintiff.

DISPOSITIVE PORTION

letter of the plaintiff of April 3, 1922, was not a definite offer and that the plaintiff is bound to pay the amount of the repairs of the yacht in exchange for the use thereof.